The Key Stone in the Carbon Tariff Wall: The Alberta Oil Sands and the Legality of Taxing Imports Based on Their Carbon Footprint

By Belleville, Mark L. | Environmental Law, Spring 2013 | Go to article overview

The Key Stone in the Carbon Tariff Wall: The Alberta Oil Sands and the Legality of Taxing Imports Based on Their Carbon Footprint


Belleville, Mark L., Environmental Law


  I. INTRODUCTION
 II. THE EUROPEAN UNION'S OIL SANDS PROPOSAL
III. WHY BORDER TAX ADJUSTMENTS ARE PROPOSED IN CONJUNCTION WITH
     DOMESTIC CLIMATE POLICIES
     A. What Are Border Tax Adjustments?
     B. Production-Based Carbon BTAs Address Competitiveness
        and "Leakage" Objections to Domestic Climate Policies
        1. Competitiveness
        2. Leakage
     C. Production-Based Carbon BTAs Would Complement Domestic
        Climate Policies by Encouraging Reduced Global Emissions
     D. Carbon-Based BTAs Would Fill the Vacuum Caused by the
        Post-Kyoto Failure of International Climate Negotiations
IV. LEGAL ANALYSIS--BOTH THE E.U.'S FUEL QUALITY STANDARD AND A
    BROADER PRODUCTION-BASED CARBON BTA ARE LEGALLY PERMISSIBLE
    A. Pertinent GATT Provisions
    B. A Three-Step Legal Analysis
    C. Products Are Not "Unlike " Based on Differing Carbon Footprints
    D. Neither the Proposed E.U. Rule nor a Broader Production-Based
       Carbon BTA Results in Impermissibly Different Treatment of
       Imports
       1. Framing the Legal Debate
       2. Basing the Treatment of Imports on How They Are Produced Is
          Not Per Se Impermissible
       3. A Properly Charges Production-Based Carbon BTA Does
          Not Result In Charges "In Excess Of Internal Charges Under
          Article III:2
       4. The E.U. Rule Does Not Result In "Less Favourable" Treatment
          Under Article III:4
       5. A Properly Crafted Production-Based Carbon BTA is
          Specifically Permitted Under Article II:2(a)
       6. Neither the E.U. Rule nor a Production-Based Carbon BTA
          Violates Article I
    E. The E.U. Rule, But Likely Not A Production-Based Carbon BTA,
       Would Also Be Permissible Under Article XX
       1. Analytical Framework
       2. The Proposed E. U. Rule
       3. The Broader Production-Based Carbon BTA
 V. INTERNATIONAL NEGOTIATIONS SHOULD BE PREFERRED OVER THE UNILATERAL
    IMPOSITION OF BTAS
    A Avoiding Trade Wars
    B. Legal Uncertainty
    C. Fully Counteracting the Effects of Leakage and Competitiveness
    D. Devil in the Details
    E. A (Wishful?) Path Forward for International Negotiations
VI. CONCLUSION

I. INTRODUCTION

On February 20, 2012, headlines from leading media outlets in England and Canada, in stories that were circulated globally, exclaimed: "Canada threatens trade war with E.U. over tar sands" (1) and "E.U. oil sands policy could spark trade complaint." (2)

What prompted these blunt and unlikely story lines? The uproar was caused by letters from Canadian officials threatening to file a claim with the World Trade Organization (WTO) should the European Union adopt a rule which treats crude oil derived from natural bitumen differently than conventional crude oil. (3)

The oil sands of Alberta, Canada, have bitumen in abundance. (4) According to the E.U. and the scientific analyses upon which it rehes, the extraction process for bitumen results in significantly greater greenhouse gas (GHG) emissions than the extraction of conventional crude. (5) As such, the E.U. has proposed classifying oil sands crude and other unconventional petrol in a way that would make them far less attractive to E.U. refineries, and that would likely drive down the global prices for such oil. (6)

This Article considers the legality of the E.U.'s proposed rule under international trade law. Implications of the policy itself and a finding of permissibility under the General Agreement on Tariffs and Trade (GATT) are likely to be far-reaching. Imposing taxes or charges on imports--Border Tax Adjustments (BTAs)--based on carbon consumed or GHGs emitted during production of the import has long been proposed as a complement to national policies seeking to reduce GHG emissions. (7) The legality of such BTAs has been the subject of considerable scholarly analysis, with no definitive answer emerging. (8) The E.U.'s oil sands proposal, although different from the commonly considered border "tax" or "charge," would be the first to actually implement a policy that bases an import's treatment on emissions in another country. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Key Stone in the Carbon Tariff Wall: The Alberta Oil Sands and the Legality of Taxing Imports Based on Their Carbon Footprint
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.